What are the two basic forecasting techniques?

What are the two basic forecasting techniques?

• A. Qualitative and Quantitative
• B. Causal and Time-series
• C. Qualitative and Causal
• D. Statistical and Production

Answer: (A)

Forecasting methods fall into two broad families: qualitative and quantitative. Qualitative approaches rely on expert judgment, opinions, market research, and scenario analysis when data are scarce or future conditions are hard to quantify. Quantitative approaches use numerical data and formal models to forecast, including time-series methods that look at patterns over time and causal models that relate the forecast variable to other factors. Because these two families capture the main waysForecasting is done, the best answer lists qualitative and quantitative. The other options mix specific techniques or include non-forecasting terms, so they don’t represent the two fundamental forecasting categories. Time-series and causal are both quantitative techniques, not the two overarching kinds; and production isn’t a forecasting technique.

Forecasting methods fall into two broad families: qualitative and quantitative. Qualitative approaches rely on expert judgment, opinions, market research, and scenario analysis when data are scarce or future conditions are hard to quantify. Quantitative approaches use numerical data and formal models to forecast, including time-series methods that look at patterns over time and causal models that relate the forecast variable to other factors. Because these two families capture the main waysForecasting is done, the best answer lists qualitative and quantitative.

The other options mix specific techniques or include non-forecasting terms, so they don’t represent the two fundamental forecasting categories. Time-series and causal are both quantitative techniques, not the two overarching kinds; and production isn’t a forecasting technique.